CEMTREX INC 10-Q

Item 1A. Risk Factors Our business faces many risks, a number of which are described in the section captioned “Risk Factors” in our Annual Report for the year ended September 30, 2024, filed with the SEC on December 30, 2024 and amended on January 10, 2025 and April 11, 2025. The risks described in our Annual Report and below may not be the only risks we face. Other risks of which we are not yet aware, or that we currently believe are not material, may also materially and adversely impact our business operations or financial results. If any of the events or circumstances described in the risk factors contained in our Annual Report or described below occur, our business, financial condition or results of operations could be adversely impacted and the value of an investment in our securities could decline. Investors and prospective investors should consider the risks described in our Annual Report and below, and the information contained in the section captioned “Forward-Looking Statements” and elsewhere in this Quarterly Report before deciding whether to invest in our securities. Our operations and performance depend significantly on global and regional economic conditions and adverse economic conditions can adversely affect our business, results of operations and financial condition. A deterioration in economic conditions and related drivers of global uncertainty and change, such as reduced business activity, high unemployment, rising interest rates, housing prices, and energy prices (including the price of gasoline), increased consumer indebtedness, lack of available credit, the rate of inflation, and perceptions of the economy, as well as other factors, such as terrorist attacks, protests, looting, and other forms of civil unrest, cyber-attacks and data breaches, public health emergencies (such as the COVID-19 pandemic and other epidemics), extreme weather conditions and climate change, significant changes in the political environment, political instability, armed conflict (such as the ongoing military conflict between Ukraine and Russia and the military conflict in Israel and Gaza) and/or public policy, including increased state, local or federal taxation, could adversely affect our operating results and financial condition. Major public health issues, including pandemics such as the COVID-19 pandemic, have adversely affected, and could in the future materially adversely affect, us due to their impact on the global economy and demand for our products and services; the imposition of protective public safety measures, such as shutdowns and restrictive health mandates; and disruptions in our operations, supply chain and sales and distribution channels, resulting in interruptions to our business and the supply of current products and offering of existing services, and delays in production ramps of new products and development of new services. In addition to an adverse impact on demand for our products and services, uncertainty about, or a decline in, global or regional economic conditions can have a significant impact on our suppliers, contract manufacturers, logistics providers, distributors, and other channel partners, and developers. Potential outcomes include financial instability, inability to obtain credit to finance business operations, and insolvency. As a result, our operating results may be impacted by the health of the global economy. Volatility and disruption in global capital and credit markets may lead to slowdowns or declines in client spending which could adversely affect our business and financial performance. Our business and financial performance, including new business bookings and collection of our accounts receivable, may be adversely affected by current and future economic conditions (including a reduction in the availability of credit, higher energy costs, rising interest rates, financial market volatility and lower than expected economic growth) that cause a slowdown or decline in client spending. Reduced purchases by our clients or changes in payment terms could adversely affect our revenue growth and cause a decrease in our cash flow from operations. Bankruptcies or similar events affecting clients may cause us to incur bad debt expense at levels higher than historically experienced. Further, volatility and disruption in global financial markets may also limit our ability to access the capital markets at a time when we would like, or need, to raise capital, which could have an impact on our ability to react to changing economic and business conditions. Accordingly, if global financial and economic volatility continues or worsens, our business, results of operations and financial condition could be materially and adversely affected. 30 Adverse economic conditions can also lead to increased credit and collectability risk on our trade receivables, the failure of derivative counterparties and other financial institutions, limitations on our ability to issue new debt, reduced liquidity, and declines in the fair values of our financial instruments. These and other impacts can materially adversely affect our business, results of operations, financial condition and stock price. Changes in U.S. and international trade policies may adversely impact our business and operating results. Macroeconomic conditions and international trade policies may adversely impact our business, financial condition, and results of operations. Weak economic conditions or reduced consumer confidence can negatively impact demand for our products, potentially resulting in lower revenues and reduced operating income. We are also subject to risks arising from U.S. and foreign trade laws and regulations, including tariffs, duties, import restrictions, and changes to trade agreements that affect the products and materials we import. These risks may be heightened by shifts in government policy, including changes resulting from political transitions. For example, the U.S. government has enacted and proposed new tariffs on certain imported goods, and future changes in trade policy—whether through new legislation, administrative action, or retaliatory measures by other countries—could increase our costs or limit our ability to source or sell products across borders. There is ongoing uncertainty surrounding future trade agreements and tariff policies, including the U.S. relationship with key trading partners such as China, Mexico, and Canada. Any escalation in trade restrictions, imposition of new tariffs or duties, or retaliatory measures by foreign governments could lead to increased costs for our products and materials, disrupt our supply chain, or impact our competitiveness in certain markets. Additionally, changes to workplace regulations, sourcing requirements, or other restrictions tied to trade policy may adversely affect our operations. While we cannot predict the outcome or timing of any future trade policy actions, any such developments could have a material adverse effect on our business, financial condition, results of operations, and cash flows. Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. None. Item 3. Defaults Upon Senior Securities None. Item 4. Mine Safety Disclosures N/A